GBP/USD consolidates gains above 1.3900 as USD retreats ahead of data

  • GBP/USD is looking to extend daily gains in the Asian session.
  • Pullback In USD lends support to the pair.
  • Risk-on mood keeps investors motivated to place bids for the cable.

The GBP/USD pair is accumulating the previous day’s gain and lacks the follow-through traction in the Asian session. The pair is moving in a narrow range of 30 pip having traveled from the highs of 1.3914 to reach the lows of 1.3885 in intraday session.

At the time of writing, GBP/USD is trading at 1.3909, up 0.17% on the day.

The move is exclusively sponsored by the recent depreciation in the greenback against its counterpart. The US dollar index (DXY), which tracks the movement of the US dollar, is struggling near the daily lows of 91.20, providing the much-needed cushion for the pair. 

The greenback erases some of the earlier gains following the no show from the US Treasury yields, which took the comments from the US Treasury Secretary Janet Yellen seriously about the ramping up of interest rates to prevent the US economy from overheating.

On the other hand, the chaos around Brexit continues to threaten the performance of sterling against its counterpart and keeps the gains in check. In recent developments, the Northern Ireland Agriculture Minister warned of legal action over post-Brexit trading arrangements. Further,  exporting companies from the UK face disruptions and bureaucratic complications. The concerns were confirmed by the British Chambers of Commerce(BCC) revealed in a survey of more than 2900 UK exporters.

Meanwhile, on the trade front India and Britain signed a $1billion trade deal post Brexit which could pave the way for a new business and exchange between the two countries.

As for fresh trade impetus, traders are looking for the releases of the UK Final Services PMI and US ADP and PMI data in the day,  which could impact the directional bet for the pair. 

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